Should you make a backup offer if the home you want is already under contract? For many transactions, making a backup offer would be a waste of time. Approximately 97% of the offers I write for clients close, but there is a small percentage of cases in which making a backup offer could make sense. I have some very happy buyers, and their recent transaction is a perfect example of when a backup offer can actually get you the house of your retirement dreams.
The Backup Offer
A couple wrote an offer on a Sequim home contingent on the sale of their California home. They were sure their California home would sell quickly, because that local market was very hot. The offer in Sequim was accepted and the transaction was classified as pending. Meanwhile, another couple from California also fell in love with this Sequim home, and they wrote a backup offer. They were also from California, but their backup offer was not contingent on the sale of their home. The first offer was bumped by the contract language, and Voila! my buyers who submitted the backup offer stepped into first position and got their dream home. Of course, there is a happy couple (my clients), and there is an unhappy couple (the bumped buyers). How does all this work, and how can you know if a backup offer makes sense?
Backup Offer Wins for 2nd Buyer
Whether writing a backup offer makes sense is a question your Sequim Buyer’s Agent really needs to be able to analyze and answer for you. There are several important issues to take into consideration. In addition, the contract language and the process of getting a backup offer into first position and bumping the other offer is very specific and must be followed precisely. And if you are writing an offer that is in first, you want to make sure that you don’t draft your contract so that you can be bumped, if possible. The full explanation of all the contract language that applies and it’s interpretation, and the process and timing of each step is beyond the scope of this article, but suffice it to say, you must do it right in order to succeed.
My 20 years as a real estate lawyer is experience that my clients often remind me is not wasted, especially when it comes to dealing with complex contract language and a backup offer.
Possibly Related Posts:
- Why Negotiating is Not for Amateurs
- Negotiating Mistakes Kill Deals
- From Offer to Mutual Acceptance
- The Danger of Unmanaged Emotions in Negotiating
- In Real Estate Knowledge is Power